Feds join whistle-blower lawsuit against Lance Armstrong

By Michael Martinez, CNN

Updated 9:01 PM ET, Fri February 22, 2013

Photos: Lance Armstrong's rise and fall28 photos

Lance Armstrong's rise and fall – After denying the allegations for years, cyclist Lance Armstrong admitted to using performance-enhancing drugs. As a result, he was stripped of his seven Tour de France titles and an Olympic bronze medal. Click through the gallery for a look at his life and career.

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Photos: Lance Armstrong's rise and fall28 photos

Lance Armstrong's rise and fall – Armstrong, 17, competes in the Jeep Triathlon Grand Prix in 1988. He became a professional triathlete at age 16 and joined the U.S. National Cycling Team two years later.

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Photos: Lance Armstrong's rise and fall28 photos

Lance Armstrong's rise and fall – Armstrong wins the 18th stage of the Tour de France in 1995. He finished the race for the first time that year, ending in 36th place.

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Photos: Lance Armstrong's rise and fall28 photos

Lance Armstrong's rise and fall – Armstrong rides at the Ikon Ride for the Roses to benefit the Lance Armstrong Foundation in May 1998. He established the foundation to benefit cancer research after he was diagnosed with testicular cancer in 1996. After treatment, he was declared cancer-free in February 1997.

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Photos: Lance Armstrong's rise and fall28 photos

Lance Armstrong's rise and fall – Armstrong leads his teammates during the final stage of the 1999 Tour de France.

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Lance Armstrong's rise and fall – Armstrong takes his honor lap on the Champs-Élysées in Paris after winning the Tour de France for the first time in 1999.

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Lance Armstrong's rise and fall – After winning the 2000 Tour de France, Armstrong holds his son Luke on his shoulders.

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Lance Armstrong's rise and fall – Armstrong rides during the 18th stage of the 2001 Tour de France. He won the tour that year for the third consecutive time.

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Lance Armstrong's rise and fall – Armstrong celebrates winning the 10th stage of the Tour de France in 2001.

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Lance Armstrong's rise and fall – After winning the 2001 Tour de France, Armstrong presents President George W. Bush with a U.S. Postal Service yellow jersey and a replica of the bike he used to win the race.

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Lance Armstrong's rise and fall – Armstrong celebrates on the podium after winning the Tour de France by 61 seconds in 2003.

Lance Armstrong's rise and fall – After his sixth consecutive Tour de France win, Armstrong attends a celebration in his honor in front of the Texas State Capitol in Austin.

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Lance Armstrong's rise and fall – Armstrong arrives at the 2005 American Music Awards in Los Angeles with then-fiancee Sheryl Crow. The couple never made it down the aisle, splitting up the following year.

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Lance Armstrong's rise and fall – Armstrong holds up a paper displaying the number seven at the start of the Tour de France in 2005. He went on to win his seventh consecutive Tour de France.

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Lance Armstrong's rise and fall – Armstrong testifies during a Senate hearing in 2008 on Capitol Hill. The hearing focused on finding a cure for cancer in the 21st century.

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Lance Armstrong's rise and fall – In 2009, Armstrong suffered a broken collarbone after falling during a race in Spain.

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Lance Armstrong's rise and fall – Young Armstrong fans write messages on the ground ahead of the 2009 Tour de France. He came in third place that year.

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Lance Armstrong's rise and fall – Armstrong launches the three-day Livestrong Global Cancer Summit in 2009 in Dublin, Ireland. The event was organized by his foundation.

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Lance Armstrong's rise and fall – In May 2010, Armstrong crashes during the Amgen Tour of California. That same day, he denied allegations of doping made by former teammate Floyd Landis.

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Lance Armstrong's rise and fall – Armstrong looks back as he rides during the 2010 Tour de France.

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Lance Armstrong's rise and fall – Armstrong's son Luke; his twin daughters, Isabelle and Grace; and his 1-year-old son, Max, stand outside the Radio Shack team bus on a rest day during the 2010 Tour de France.

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Lance Armstrong's rise and fall – Armstrong finished 23rd in the 2010 Tour de France. He announced his retirement from the world of professional cycling in February 2011. He said he wanted to devote more time to his family and the fight against cancer.

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Lance Armstrong's rise and fall – The frame of Armstrong's bike is engraved with the names of his four children at the time and the Spanish word for five, "cinco." His fifth child, Olivia, was born in October 2010.

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Lance Armstrong's rise and fall – Armstrong competes in the 70.3 Ironman Triathlon in Panama City, Florida, in February 2012. He went on to claim two Half Ironman triathlon titles by June of that year.

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Lance Armstrong's rise and fall – Armstrong addresses participants at the Livestrong Challenge Ride on October 21, 2012, days after he stepped down as chairman of his Livestrong cancer charity.

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Lance Armstrong's rise and fall – International Cycling Union President Pat McQuaid announces the decision to strip Armstrong of his seven Tour de France wins and ban him from the tournament for life on October 22, 2012. "Lance Armstrong has no place in cycling," he said.

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Lance Armstrong's rise and fall – In January 2013, Armstrong speaks with Oprah Winfrey about the controversy surrounding his cycling career. He admitted, unequivocally and for the first time, that he used performance-enhancing drugs while competing.

Story highlights

"The defendants failed to live up to their agreement," postal official says

"We disagree...whether the Postal Service was damaged," Armstrong attorney says

The U.S. Department of Justice said Friday it has joined the whistle-blower lawsuit against cyclist Lance Armstrong that was originally filed by a former teammate.

The Justice Department will file its formal complaint in 60 days.

Armstrong, the onetime legendary and now disgraced cyclist, has admitted to using performance-enhancing drugs. He was the team's lead rider when the U.S. Postal Service sponsored the team from 1996 to 2004 and Armstrong won six of his seven Tour de France titles, the Justice Department said.

The civil lawsuit alleges that Armstrong and former team managers submitted false claims for government funds to the sponsoring Postal Service by their "regularly employing banned substances and method to enhance their performance" in violation of the sponsorship agreement, the federal announcement said.

"Today's action demonstrates the Department of Justice's steadfast commitment to safeguarding federal funds and making sure that contractors live up to their promises," Stuart F. Delery, principal deputy assistant attorney general for the civil division, said in a statement.

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Between 2001 and 2004, the Postal Service paid $31 million in sponsorship fees, but that affiliation has now been "unfairly associated with what has been described as 'the most sophisticated, professionalized, and successful doping program that sport has ever seen,' " said Ronald C. Machen Jr., U.S. Attorney for the District of Columbia.

"In today's economic climate, the U.S. Postal Service is simply not in a position to allow Lance Armstrong or any of the other defendants to walk away with the tens of millions of dollars they illegitimately procured," Machen said.

The suit that the Justice Department is joining is by former Armstrong teammate Floyd Landis and was unsealed by U.S. District Court Judge Robert Wilkins. It provides details of the payments Armstrong and his team received while they promised to abide by the rules of cycling's governing bodies. Those rules prohibited the use of certain performance enhancing substances and methods.

"This lawsuit is designed to help the Postal Service recoup the tens of millions of dollars it paid out (to) the Tailwind cycling team based on years of broken promises," Machen said.

The suit also names as defendants Johan Bruyneel, who had managed the U.S. Postal Service and Discovery racing teams on which Armstrong raced, and Tailwind Sports, which was the team's management entity, the Justice Department said.

The Justice Department is joining the lawsuit's allegations against Bruyneel and Tailwind, but it isn't intervening in the suit's claims against several other defendants, the agency said.

The U.S. Postal Service supported the Justice Department intervention.

This so-called qui tam case allows the resources of the federal government to intervene on the side of a whistle-blower. If the suit is successful the government stands to recoup millions, and Landis stands to claim a sizable share of the proceeds -- possibly in the millions of dollars. The government had been working on the case for several weeks in advance of a likely federal intervention.

"The defendants agreed to play by the rules and not use performance enhancing drugs," general counsel and executive vice president Mary Anne Gibbons said in a statement. "We now know that the defendants failed to live up to their agreement, and instead knowingly engaged in a pattern of activity that violated the rules of professional cycling and, therefore, violated the terms of their contracts with the Postal Service."

The lawsuit accuses the former management of Armstrong's team of defrauding the federal government of millions of dollars because it knew about the drug use and didn't do anything.

The federal government had been evaluating for weeks whether to intervene in the lawsuit.

An attorney for Armstrong, Robert Luskin, said that ongoing discussions between the federal government and Armstrong's legal team had collapsed.

"Lance and his representatives worked constructively over these last weeks with federal lawyers to resolve this case fairly, but those talks failed because we disagree about whether the Postal Service was damaged," Luskin said. "The Postal Service's own studies show that the service benefited tremendously from its sponsorship -- benefits totaling more than $100 million."

Former teammate Landis, who was stripped of his 2006 Tour de France title after failing a drug test, filed the lawsuit in 2010 against the team, which was sponsored the U.S. Postal Service.

Landis was a teammate of Armstrong on the Postal Service-sponsored team from 2002 to 2004, and his lawsuit was filed under the False Claims Act, the Justice Department said. That act is commonly called the whistle-blower law.

The law permits the federal government to investigate allegations and intervene, the Justice Department said.

The act was originally passed in 1863 when government officials were concerned that suppliers to the Union Army during the Civil War could be defrauding them.

In 1986, Congress modified the law to make it easier for whistle-blowers to bring cases and give them a larger share of any penalties collected. Whistle-blowers can now take home between 15% and 30% of the sums collected in their cases.

For years, Armstrong had denied drug use and blood doping, but he publicly admitted such use in January, three months after international cycling's governing body stripped him of his seven Tour de France titles.

That stripping came after a damning report by the U.S. Anti-Doping Agency accused Armstrong and his team of the "most sophisticated, professionalized and successful doping program" in cycling history.

That agency praised the Justice Department's announcement.

"The U.S. Postal Service Cycling Team was run as a fraudulent enterprise and individuals both inside and outside of sport aided and abetted this scheme and profited greatly," CEO Travis T. Tygart said in a statement.